Corn and Soybean Digest

Richard Brock

Richard

Brock

Articles by Richard Brock

As planting season gets underway, every year getting the crop in the ground and good growing weather is important. This year may be more important on both fronts than normal, however.

This Boom is Different

Will this boom turn into a bust as all others have? There have basically been two boom bust cycles in agriculture. The first was during the 1910s that resulted from sharply rising export demand during World War I. Farm incomes surged and farmland prices increased significantly. That soon turned into a bust.

Futures Confidence Needed

No matter what the business or sport, good decisions require confidence. A trader in the stock market will not make good decisions if he has lost his confidence. A professional basketball player or football player doesn’t perform as well if he’s lost confidence in his ability.

Still A Bear Market

Following the Jan. 12 crop report, the industry was in shock that the numbers were not as bullish as anticipated. Granted, the trend in usage in both corn and soybeans is in the wrong direction, but this does not make the 2012 crop any less significant.

An “Event” Market

Since Sept. 1, many producers have watched and some ignored the fact that corn prices have dropped by over $2/bu. and soybeans approximately $3.50/bu. While some may think this is a short-term correction in a long-term bull market, I am not in that camp.

Farmland Prices – Staying Strong

Remove Some of Next Year’s Risk

Readjust Your Thinking Cap

The October crop report confirmed that the laws of economics have not been repealed. Keep the price of any commodity too high for too long and people will find a way to use less and/or grow more. This was the sobering result of the USDA report released on Oct. 12.

The Thrill Is Gone

Without a doubt this is probably not a very popular headline. In my September article I outlined why the odds were very high that the corn and soybean market would peak in September. As I write this in mid-September, it appears that was the case. So let’s assume your neighbor paid no attention to that information and sold nothing and now he’s asking you what to do. Let’s think about what you might tell your neighbor.

Odds Favor An Early Top

The charts below are both interesting and revealing. History does seem to repeat itself when it comes to the seasonality of the cash corn market making its highs and lows.

How to Market in Tough Markets

Lenders always encourage producers to have a marketing plan, and most producers know they need one. But in years like this, even some of the best mapped out marketing plans have the potential for leading to a road of disappointment.

Springtime Price Volatility: Expect Record Swings

There is certainly no lack of fundamental changes impacting grain prices that will influence price swings this spring: worldwide economic turmoil, Egypt, Libya and the earthquake in Japan. All of these factors providing extreme unknowns not only to the energy markets, but also to the grain and livestock markets.

Has the Corn Market Peaked?

Technical market analysis seems to have been less reliable in the last couple of years than the historical norm. There were many flashing lights, however, in the middle of February indicating that there is at least a possibility, and some would say a reasonably high probability, that the corn market peaked in February.

One Man’s Floor is Another Man’s Ceiling

As corn and soybean producers, it’s often important to remember that for every bushel of grain sold, someone has to buy it. Market prices and movements are something like a golf shot. No matter how good or bad it is, it pleases one person and upsets another.

Ethanol Industry Will Evolve

In any industry, profits swing up and down in the short term, but for the ethanol industry the major long-term profitability trend continues to be quite favorable. Growth from this point will not likely be as fast and furious as it was in the previous five years, but growth nonetheless is continuing.